Gold rises over 1% as softer oil prices ease inflation worries

Gold ​rose more than 1% on Monday as softer ⁠oil prices eased inflation concerns, while investors awaited key US inflation data and fresh signals from the Federal Reserve on its policy outlook.

Spot ‌gold climbed 1.4% to $4,123.46 per ounce by 0428 GMT, while US gold futures for December delivery ‌also rose 1.4% to $4,132.70. Bullion gained about 5% last ‌week.

Oil ⁠prices fell after US President Donald Trump said ⁠he was highly unlikely to order further attacks on Iran as talks to end the conflict continued, easing concerns about potential supply disruptions.

Lower oil prices can ​ease inflationary pressures and ‌reduce expectations that interest rates will stay higher for longer, lowering the opportunity cost of holding non-yielding bullion.

"Trump's more conciliatory tone toward Iran is helping keep a lid on ‌oil prices, which in turn eases some of the ​inflation pressure that had been weighing on the metal along with a modest pullback in the dollar," ⁠said Tim Waterer, chief market analyst at KCM Trade.

The dollar softened, making greenback-priced bullion more affordable for buyers overseas.

Meanwhile, US job ‌growth accelerated in October and the unemployment rate fell to 4.1%, reinforcing expectations that the labour market remains resilient and keeping the Fed on track for a December interest-rate increase.

Traders currently see an 81% chance that the Fed will raise rates in December, up from 71% prior to the ‌payrolls data, according to CME's FedWatch tool.

Market participants now await the US ​Consumer Price Index data due on Tuesday and the Producer Price Index on Friday to further gauge ⁠the Fed's monetary policy stance.

"Any hot readings would likely firm ⁠the dollar and lift the odds of a December rate hike, which would quickly put gold back on ‌the defensive," Waterer said.

Among other metals, spot silver climbed 2.5% to $53.15 per ounce, platinum gained 1.3% to $1,553.23 and palladium ​rose 2.1% to $1,045.11.